Helphire rewards bosses after profits rise

Bath firm Helphire has seen its profits more than quadruple, just months after laying off hundreds of staff in the city.

In a trading update for the year ended June 30 published today, the company revealed its adjusted operating profit had risen from £4.7-million in 2009 to £21.4-million.

That profit has been made despite revenues falling by £70-million to £304.2-million and after “provision for  management incentive payments”.

The company said the incentive payments for bosses were for “continued delivery of the turnaround plan of a smaller but more profitable business”.

The company, which provides replacement vehicles for motorists involved in accidents, has axed around 1,200 jobs, many in Bath, in the last year-and-a-half.

Chairman Richard Rose said: “This  has been a significant  turnaround situation and I  am delighted with the progress demonstrated by these performance indicators.”

The unaudited figures show that the Lower Bristol Road-based firm spent £13.2-million in one-off restructuring costs in the year up to June, including  redundancy payments and reorganisation expenses.

It has cut its costs drastically. The cost of its overheads has dropped £42.3m in the six months to the end of June compared with the half-year  period  to December  2008, which was the period immediately before its restructuring programme began.

The firm has paid down almost a third of its debt over the past year. Its total net debt now stands at £165.3-million, a reduction of £77.5-million since last June.

The trading update states: “Since the interim management statement on May 5, the group has successfully continued to execute its previously outlined recovery plan.

“Helphire expects its results for the year ended June 30 to show a strong recovery in performance as a result of the plan and to be in line with expectations.”

Helphire is closing its call centre in the city and concentrating such work in two offices in the north of England, although the firm insists its headquarters will remain at Pinesgate.

The company’s restructuring programme has been broken down into three phases - ‘Focus, Drive and Broaden’ - with the firm about to enter the second.

The report intimates that a major contract is just round the corner, with letters of  intent having been exchanged with  a “significant and recognised”  financial services brand.

But the firm says it continues to be wary.

“We  are  cautious  about  current  trading  as  high  petrol prices and economic uncertainty  may be a contributory factor to fewer road miles being driven,” explained the statement.

“This backdrop, coupled with the recent period of dry weather, has lowered the number of accidents currently being referred.”

A preliminary announcement of Helphire’s audited results is planned for October 1.